Last week, SPC held an exclusive roundtable discussion featuring representatives from Midland, Sappi, and Sustana. The group provided critical insights on the current state of the paper market, empowering SPC clients to make well-informed business decisions.

SPC’s Paper Expert Panel

• Craig Busby from Midland Paper
• Mike Hall from Sappi
• Bryce Petty from Sappi
• Brendan Wilson from Sustana

Tariffs

• The panel agreed the current tariffs and any ongoing threat of tariffs have so far had minimal impact on the industry. While this is certainly good news, it is understood conditions could still change anytime.
• As of now, it is business as usual and has even been quiet for the last couple of months.
• The main concern is the uncertainty about the future. If significant tariffs are introduced, the market may need to adjust. Mills are remaining calm as this situation continues to unfold.
• Tariffs on some products have been up to 10%.

Pricing & Market Conditions

• The market is currently soft on both the coated and uncoated paper.
• No price increases are anticipated for 2025. However, this could change if there are more mill closures. If no additional capacity is removed from the market and tariffs do not rise significantly, we can expect prices to remain stable.
• Don’t foresee a big change in sourcing. The U.S. is a good, healthy market and mills want to be here.

Mill Operations

• Our panel reassured that there are no foreseeable potential disruptions to the mills, such as strikes, union issues, or other production issues.
  • No planned downtime or shutdowns.
• Do not see any issues sourcing specific stocks or grades.
  • Unless tariffs cause a supply drought from overseas.
• Sappi’s paper machine conversion earlier this year has only impacted their weight web coated area.
  • Text grades, web-only are on allocation through July.
  • Sappi is making a pivot to investing more in the package side of the market at the mills that make lightweight publication paper. Assuring direct mail stock is running at a healthy amount and is still regularly available.
  • Running the Somerset gloss text approximately every other week.
• Pixelle Specialty Solutions, the third-largest producer of uncoated free sheet paper in North America, moved up its Chillicothe mill closure day to August.
  • Planning to relocate some operations to Pixelle’s Spring Grove, Pennsylvania, facility.
• Our panel hinted that, from an industry standpoint, there is concern that there is more capacity than demand globally. This puts pressure on older, smaller mills globally to get through a declining market.
  • Resulting in continued capacity reductions over time.
• Digital Web Upcharges: Rolls under 17 inches face upcharges; minimum roll size is 7.25 inches.

Capacity & Demand

• Lead Times
  • Coated papers vary based on grades. Sheetfed is about 3-4 weeks and some stock is available for immediate delivery.
  • Uncoated paper has an average lead time of 3 – 3.5 weeks.
• Current capacity utilization is 85-90%.
• The board segment is soft; folding box segment is healthier.
• Web market remains active; sheetfed is steady.
• Heavy weights have the most growth potential. This stock fits every domestic mill and is more accessible than light weights.
• The direct mail segment of the market is sustainable and healthy.
• Growth areas: heavyweight paper for DM, personalization, and digital print. Digital continues to grow rapidly.

Sustainability

• The USPS Postal Incentives have given more life to FSC and FSI papers, but demand hasn’t really changed all that much if you look at the trend line over the past couple of years.
• No supply issues or challenges in fulfilling sustainable paper orders, such as FSI and FSC?
  • Our experts emphasized a reminder that the amount of acreage for FSI wood is strongly growing. FSC is not expanding to the same extent, which is why there is typically a surcharge.
• If you order an SFI or FSC stock, the same mill will run the virgin stock.
• No supply issues for certified fiber.

Innovation & Looking Forward

• Mill Investments
  • Sustana
    • Adding a dryer unit to pulp facilities.
    • New scanners for quality control on text machines.
    • New ERP system.
    • Exploring U.S. paper assets to navigate tariff exposure.
  • Sappi
    • Focused on harmonizing internal systems globally; no major capital investments planned.
  • Midland
    • Investing in an ERP system
    • Adding to converting capacity, which allows them to help mills by taking mass paper rolls and converting to stock and custom sizes, streamlining the supply chain.
• The experts urged that although it seems optimistic, issues could arise. The market will right-size and adjust, but their advice was to always plan ahead.

• The advice was consistent from each expert
  • Plan ahead. Planning ahead gives more flexibility to modify an order if needed.
  • Communication is essential in managing the ever-changing market.

Contact your SPC Sales Rep with any additional questions.